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This paper studies the causal impact of court deferrals, a legal strategy to help defendants
avoid a felony conviction record, on the future criminal and labor market outcomes of
first-time felony drug offenders. To accomplish this, we exploit two natural experiments
in Harris County, Texas, in which defendants appearing in court one day versus the next
experienced abruptly different likelihoods of deferral. In 1994 deferral rates dropped by 34
percentage points the day following the implementation of a penal code reform; in 2007
deferral rates increased by 22 percentage points the day after the unexpected failure of a
ballot initiative to expand the county jail. Using administrative data and local polynomial
regression discontinuity methods, we find robust evidence consistent across both
experiments that regimes with expanded use of court deferrals generated substantially
lower rates of reoffending and unemployment over a five-year follow-up period. Additional
analysis delves further into the timing, nature and incidence of these impacts. Together
our results suggest that increasing the use of deferral programs may be an attractive and
feasible option for a jurisdiction seeking to reduce the fiscal cost and community impact of
its criminal justice system.